Episode 7: High Frequency Trading (Part 2)

Mark Soberman: Cool. Where do you think–so we know–I mean, I’ve seen Trend Jumper, I’ve traded with it, you know, it’s compelling, it’s awesome, it does exactly what we’re saying it does, but still I can guarantee you right, there’s going to be that guy, that person, some people, who will get it and will still find a way to fail with it. I mean, what are those failure points? I mean, what seems to cause that?


Troy Noonan: I think the number one failure point is trying to trade it before you’ve mastered not only the system but just some regular common sense things about the markets in general. You have to be able to mitigate your risk exposure to the market. So we say, “Don’t overtrade. Don’t trade in markets that you’re undercapitalized in. Make sure you’ve practiced a strategy and make sure you’ve seen enough trades so that you could believe in it.” You know, you will get losses like any other strategy, getting a loss here, a loss there, even a couple in a row, sometimes even more, sometimes three in a row, that’s common with any strategy.


And for those who have no experience with the market, it could be frightening, it gets you in touch with your–you know, that whole primal sense of, you know, you have to survive, and you just took a loss or two, “Oh, no.” You know, you panic, you quit. Those are the fail points. You don’t give yourself the gift of the big perspective where you see, “Okay. Well, even though it’s had a couple of losses, the winners come afterwards in session after session after session.” You’re able to quit positive according to the trade plan, the equity keeps growing, that’s when you start to get over those fail points and actually, you know, you get on a good position to succeed.


Mark Soberman: Sure. That makes sense. So, you know, typically, I mean, is it your opinion that it’s just a–there’s not enough practice in the trading? Is there just too much dancing around from market to market? Is there–people get too discouraged over a few losers? I mean, you know, how do you get that commitment to where you don’t do just what I’m describing and constantly chasing that performance?


Troy Noonan: Yeah. Real important question, Mark, because it’s what everyone seems to experience when they’re just starting out. So many traders are chasing the next, you know, great strategy and they never give any of them a chance. I mean, they might all be good but a few losses, they throw the baby out with the bath water. Their account went down and now they’re off running around looking for the next strategy, and the same pattern over and over until they’re just out of trading.


And, Mark, I have a very simple way of looking at it and that is this. You have to build a belief structure. If you can’t believe in what you’re doing, there’s no way you could succeed at it, and it does come with practice and repetition. You have the tools to do it. SIM trading. I mean, why not? You can back test, which we always teach is critical for building a foundation so that you believe in your strategy, but also the bigger thing for me is to know why I’m trading in the first place. And I trade to make money but I don’t–that doesn’t mean whether this trade wins or loses, because now I have to take another trade and then I have to take another trade. I mean, that’s what we do as traders; we trade.


So making money has to mean more than what the result is of this trade. Making money is the practice of trading, it’s the business of trading, and it’s your overall result that keeps growing. And you have to trade through losses to get to some winners sometimes, but you keep your risk very small, you stick to your plan, and then you grow your account accordingly, and achieve your reason for trading in the first place, which is to make money. And that, I think, is the key.


Mark Soberman: Makes sense. Definitely. I mean, it’s–you just have to–I think we just talked about this just a few minutes ago in our weekly hangout, you just have to get through that 90 to 180 days. I mean, if you just can get through that, all the rewards that make trading so special happen. Brian, I wanted to bring you in to this. Do you have any questions for Troy?


Brian Short: Yeah. Troy, you and I have talked a little bit about performance, but specifically on crude, one of my favorite markets, can you kind of tell us how things have been going there and then I think today’s session was a little bit challenging, kind of talk to that.


Troy Noonan: Yeah, sure. It was challenging. It’s maybe the most challenging session that we’ve seen in weeks. Crude oil has been spectacular. You know, we were on the road show together. We had a lot of fun in October and I was showing it off every single day live at that point in time and, you know, just amazingly, it’s just been on a real winning streak session after session. It literally hasn’t had a losing session at all in October or in November until today. And even today, it finally climbed its way back, but you have to really trade through the session and it was a PM session that really put it positive.


But just, you know, overall, it’s been winning in the high 70 percent range for the AM session and close to 80 percent even in the PM session. So it’s just been great. I don’t even like to make claims like that because it just seems so unrealistic, but that’s literally what it has been doing. I don’t expect it will do that forever. I can only hope, but I expect that, you know, it will probably drop down a little bit, but who knows? You just never know.


Mark Soberman: All right. Brian, appreciate that. One of the things–well, let me ask one other or maybe a couple of quick questions, Troy, as far as, you know, give us an idea–you got a successful trade in the Russell E-mini, what was that typically worth? What’s a good average?


Troy Noonan: Well, the Russell E-mini, the range has been kind of light lately and so like today, if you’re trading with a Power of Quitting one, for example, literally only–


Mark Soberman: No, more like I’m just saying on a successful trade, what’s–how much does it make on average on a successful trade?


Troy Noonan: Successful trade could make anywhere from, say, 12 to 25 ticks.


Mark Soberman: Was does that mean in dollars?


Troy Noonan: All right, $10 a tick, so $120 to $250.


Mark Soberman: Cool. What about like crude oil?


Troy Noonan: Crude oil could make anywhere from say $100 to $300.


Mark Soberman: And that’s per contract. And then what about something like Dow E-mini?


Troy Noonan: The Dow E-mini, that’s going to make anywhere from, say, $50 to $150.


Mark Soberman: Cool. And then let me ask you on Forex on the big swing trades that the daily charts, you know, what tends to be the pip range when you’re successful?


Troy Noonan: Well, it depends on the pair, but it’s in the hundreds of pips because, with those trades, I like to use two positions, and the fixed target itself could be, you know, 100 to 300 pips, and then the trailing stop could go for quite a bit longer. I mean, I’ve seen 500 and 600 to 700 pip trades with Forex.


Mark Soberman: Nice. Yeah, that’s awesome. Definitely what people need. A lot of times, people in Forex are trying to scratch out 5, 6, 7 pips, then paying the broker half of that and it never amounts to anything.


Troy Noonan: Exactly.


Mark Soberman: So, you know, we have some other things that we test. We test a lot of different systems out there and we’ve been running this one Forex system, Forex Robot. I think for–it’s got to be six months, eight months. It’s funny to watch it because it’s taking tons of trades as basically where it started, you know, so it’s just kind of funny to watch it go up and down, but it’s just trying to scalp that market and it just never gets anywhere. So–


Troy Noonan: It’s a whole lot of work.


Mark Soberman: Yeah. It’s a lot of work and it’s just–I guess the broker does well and they’re happy with you, but that’s probably about it so–great. Well, I appreciate the time, Troy. That was great. I’m sure there’s lots of interest on Trend Jumper. You know, this isn’t to try to sell anybody on anything, we just want to give you information or the next steps for you, if you have any interest and all. It’s just seeing more about it, and come in to one of our live webinars or watching one of our recorded webinars.


If you’re in our mailing list, you should be already getting notified of it. If you’re not, you know, go to premiertraderuniversity.com. Feel free to log in or let’s just say opt in there, just, you know, leave your email address and we’ll get you information, or you can go to netpicks.com as well and likewise we’ll do the same. And, you know, we like to share a lot of information with you first so you guys can see it work, see the results, you see winners, you see losers, you’ll see everything in between, and then you can make a good decision for yourself if this is a solution for you.


It’s going to be right for a lot of people and the level of enthusiasm for it is quite high, especially when we get a chance to demo it, so, you know, give yourself that opportunity, especially if you’ve been struggling with your trading or you’re just not getting the results that you’re after. So again, we appreciate everybody listening today. Certainly, if you have any questions, you can always send those to info@netpicks.com. I think we also have a podcast@netpicks.com. So T.J., thank you very much.


Troy Noonan: Oh, it was fun. Thank you for having me.


Mark Soberman: All right. Good success to everybody’s trading. Thanks, Brian. We’ll talk with you in the next Day Trading Authority.

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